Absolute and Relative Gains in International Relations Theory

The problem of absolute and relative gains divides neoliberal institutionalism and structural realism. The former assumes states focus primarily on their absolute gains and emphasizes the prospects for cooperation. The latter supposes states are largely concerned with relative gains and emphasizes the prospects for conflict. Existing work in international relations theory generally traces the differences between these two theories to different assumptions about states' preferences. Using a simple game-theoretic model, this essay offers a reformulation of the problem of absolute and relative gains that links changes in the states' behavior, the feasibility of cooperation, and especially the states' concern for relative versus absolute gains explicitly to changes in the constraints facing the states. Many of the differences between neoliberal institutionalism and structural realism appear as special cases of the model.